Dear Momentum Options Subscriber,
Futures were volatile ahead of this morning’s open following multiple bomb threats against several airlines. It was reported that five U.S. flights were being targeted, but those threats have turned out to be bogus, as the aircrafts in question have landed.
The airline stocks were weak on the open and are now trying to bounce back. Delta Air Lines (DAL, $43.20, down $1.15), JetBlue Airways (JBLU, $20.57, down $0.13) and United Continental Holdings (UAL, $56.00, down $0.31) have recovered but are still lower for the session.
Despite the weakness in the airline sector, the Dow Transports ($TRAN, 8,417, up 23) have held up well, with the index trying to build a floor of support at current levels.
Turning to the market, the Dow is down 27 points to 18,012, while the S&P 500 is lower by 3 points to 2,108. The Nasdaq is off 7 points to 5,075, and the Russell 2000 is higher by a 2 points to 1,251.
I have a New Trade on a name that has cleared its recent 52-week high. A run past $20 is likely in the mix, and I want to play the move using call options.
Momentum Options Play List
Closed Momentum Options Trades for 2015: 55-18-1 (74%). All trades are dated and time stamped so new subscribers can look at the past history to see how the trades have played out.
Do not risk more than 5% of your trading account on any one trade but do try to take all of the trades. Please remember, all “Exit Targets” and “Stop Targets” are targets. You should not have any “Hard Stops” entered to close any trades or “Exit Orders” in your brokerage account unless I list one. I will send out a “Profit Alert” or “New Trade” if I want you to close a position or if a new trade comes out. Otherwise, follow instructions at all times in the 9 a.m. and 12 p.m. – 1 p.m. updates. Also, I will usually give you a heads-up if I think I’m going to send an email outside of these time frames.
All prices given in this update are current as of 12:00 p.m. EST.
I hereby disclose that I will be participating in the following trade(s). Every new Momentum Options recommendation is listed with the price at which I entered my own position. If the price is slightly different than my recommended entry or exit price when you receive the alert, don’t let that keep you from getting into or out of a trade. Occasionally, you might even get a better “fill” price than what is posted in the Open Trades and Closed Trades.
Opko Health (OPK, $18.79, up $0.48)
Buy to open the OPK July 20 calls (OPK150717C00020000, $0.60, up $0.10) at current levels.
Shares have cracked $18 again and are at fresh 52-week peaks. I have talked about a push to $20 or higher, and I like these calls at current levels to play the move.
These are the regular monthly options that expire on July 17.
Sony (SNE, $30.54, down $0.26)
SNE July 33 calls (SNE150717C00033000, $0.45, down $0.05)
Entry Price: $0.45 (6/1/2015)
Exit Target: $0.90
Stop Target: None
Action: Shares are in the process of backtesting support at $30.50-$30 and the 50-day moving average. This level has held for much of 2015, but there is risk to $29-$28. A move above $31.50-$32 would be a bullish sign that the recent selling pressure is over.
Rambus (RMBS, $15.24, up $0.01)
RMBS July 15 calls (RMBS150717C00015000, $0.95, flat)
Entry Price: $0.50 (5/27/2015)
Exit Target: $1.30 (Limit Order on half)
Stop Target: $0.65 (Stop Limit)
RMBS August 16 calls (RMBS150821C00016000, $0.75, flat)
Entry Price: $0.43 (5/27/2015)
Exit Target: $0.90
Stop Target: $0.55 (Stop Limit)
Action: A close above $15.75-$16 could lead to a run at $17-$18. Near-term support is at $15, followed by $14.50.
Dot Hill Systems (HILL, $7.03, flat)
HILL September 7.50 calls (HILL150918C00007500, $0.65, flat)
Entry Price: $0.55 (5/21/2015)
Exit Target: $1.10
Stop Target: $0.57 (Stop Limit)
HILL December 7.50 calls (HILL151218C00007500, $0.95, flat)
Entry Price: $0.80 (5/21/2015)
Exit Target: $1.60
Stop Target: $0.85 (Stop Limit)
Action: Support is at $7, with $6.75 serving as backup. A close below $6.75 will likely trigger the Stop Limits. Resistance is at $7.20-$7.25.
You can read my full update on HILL and check out its 15-year chart in the May 22 Pre-Market Update.
iShares Russell 2000 (IWM, $124.52, up $0.24)
IWM June 128 calls (IWM150619C00128000, $0.30, up $0.06)
Entry Price: $0.70 (5/19/2015)
Exit Target: $1.05 (Limit Order on first half), $1.40 (Limit Order on second half)
Stop Target: None
Action: Resistance is at $125-$125.50. Short-term support is at $123 and the 50-day moving average, followed by $122 and the 100-day moving average.
Limelight Networks (LLNW, $4.22, down $0.08)
LLNW September 4 calls (LLNW150918C00004000, $0.65, flat)
Entry Price: $0.35 (4/29/2015)
Exit Target: $1.00 (Limit Order on half)
Stop Target: $0.45 (Stop Limit)
Action: A move above resistance at $4.50 could lead to a run to $4.75-$5. Support has moved up to $4.25, with $4 serving backup.
Trades on Hold — other 2015 Portfolio Open positions (1): These are trades that are still open in the portfolio but are down over 50%. They have longer expiration dates and are on “hold” but are not worth mentioning until they turn around. This means I would not open any new positions. I’m still keeping track of the trades and will record the results accordingly when the trade closes or if the options expire. Click on the Open Trades and Closed Trades pages to see all open and closed positions.
BlackBerry (BBRY) June 13 calls (from March 2015) — This is a speculation trade from early March on BBRY receiving a takeover offer of $14 or better by mid-June. These options will carry some premium through the first week of June. I would like to be out of this trade by next Friday’s close. This gives the trade until June 10 for Blackberry to get a takeover offer — Continue to hold.
Editor and Chief Options Strategist